February 6, 2023

HARRISBURG, PA. (AP) – Gov. Josh Shapiro’s previous refusal to disclose who paid for its glittering opening ceremony has exposed the loophole in state law that allows governors in Pennsylvania to evade the kind of transparency sometimes required elsewhere is.

Presidential inaugural committees are required by law to disclose donors who give more than $200 to inauguration ceremonies. States like Virginia, Maryland, and New Jersey have such laws, as do cities like New York and Philadelphia, where city officials also limit the amount a single donor can give for an initiation.

Many other states do not have such disclosure laws, and millions of dollars can be secretly given by donors seeking preferential treatment under state regulations, having contracts with the state government, or relying on the state government for subsidies.

That raises serious concerns about conflicts of interest, said Aaron McKean, attorney for the Washington-based Campaign Legal Center, a nonprofit good government group.

“The whole goal here is to prevent corruption, or even the appearance of corruption,” said McKean. “This is how we build trust in our elected officials and our government.”

Nobody, he said “Gives this money just for fun.”

Shapiro’s party in Lititz last week — tickets were $50 apiece while fundraisers sold sponsorship packages with VIP perks — drew hundreds, perhaps thousands, of people to drink, eat and watch top-notch musical entertainment including Smokey Robinson, Meek Mill, Wiz Khalifa and Berg Freude.

Asked about the donors at an independent press conference last week, Shapiro, a Democrat, did not commit to identifying them.

“We will follow all laws required for reporting and disclosure and that is the approach we will be taking,” Said Shapiro.

No law requires such disclosure. But failing to disclose who paid for it sets Shapiro apart from his Pennsylvania predecessors.

In states that do not regulate opening ceremony donations, fundraising is typically set up and conducted by the aides of a governor, ally, or party organization.

Governors have in some cases announced the first donors, although sometimes they do so reluctantly and only after public criticism.

In Florida, where Republican Gov. Ron DeSantis won a second term, the Florida Republican Party raised money for its inaugural party — with sponsorship packages totaling $1 million — and filed a campaign financial report showing donations in November amount of more than 10 million US dollars were disclosed and December.

In Texas, the Texas Inaugural Committee fired donors, but the Texas Tribune sued — successfully — for details of how $5.3 million was spent on the 2019 event.

In Shapiro’s case, he appointed top campaign officials to lead his founding committee and organized it as a 501c(4) nonprofit organization under federal tax laws that do not require donor disclosure or limit who can give donations or amounts.

Shapiro’s staff did not respond to questions about why he chose not to disclose the donors’ identities.

Shapiro’s predecessor, Democrat Tom Wolf, capped donations for his inaugural celebrations at $50,000 per donor and announced those who contributed at least $500. In 2019, donors included unions, energy companies, health insurance companies, law firms and developers.

Fundraisers were sought in Shapiro’s fundraising pitch to Insiders “Principal Sponsor” Donate up to $150,000 for a package of a “Limited Edition Commemorative Coin” gift, 10 tickets to a VIP reception, “prefers” Tickets to the inauguration ceremony and other perks.

Money is often left over in a 501c(4)’s bank accounts and there is no law dictating how the money must be spent. McKean said that without transparency, such leftover money can become one “black box” for a governor.

Over the past two decades, Philadelphia has introduced campaign finance reforms to combat corruption. These city statutes treat donations to a charter committee the same as donations to a campaign committee and require disclosure of who donated and how much they donated.

It limits donations — currently $3,100 for individuals and $12,600 for businesses and organizations — and dictates how leftover money must be handled.

City council members who approved the law understood that unregulated donations to charter committees could circumvent the purpose of restrictions in the campaign finance law, said J. Shane Creamer, executive director of the city’s ethics committee, which enforces the law.

“And we’d be back to the influence days of big donors, which we had before the Campaign Finance Act went into effect.” Said Creamer.

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